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  • Writer's pictureJeremy Springer

1099-K Reporting Requirements Delayed

Updated: Jan 18

A third party settlement organization (TPSO) is required to file an information return for each calendar year with respect to payments made in settlement of certain reportable payment transactions. Form 1099-K, Payment Card and Third Party network Transactions, is the form that settlement entities file to meet the reporting requirement. A typical example is when a customer purchases goods or services from a business using a credit card. The credit card company in turn is required to issue the business a 1099-K reporting all of the credit card transactions that were processed during the year.


As originally enacted in 2008, a TPSO was not required to report third party network transactions with respect to a participating payee unless the gross amount that would otherwise be reported exceeded $20,000 and the number of such transactions with that participating payee exceeded 200.


The American Rescue Plan Act of 2021 lowered the reporting threshold with respect to any participating payee to $600 in aggregate payments, regardless of the aggregate number of such transactions. Notice 2023-10 delayed implementation of this new reporting threshold for calendar years beginning before January 1, 2023. Thus, the $20,000/200 transaction threshold continued to apply for all calendar years prior to 2023.


The IRS recently issued Notice 2023-74 which delays the $600 threshold for one more year. Thus, the $20,000/200 transaction threshold continues to apply for the 2023 calendar year.


Cross Reference: Notice 2023-74


 

Legal Disclaimer: This post contains general information for taxpayers and should not be relied upon as the only source of authority. Taxpayers should seek professional tax advice for more information. This information was current at time of posting; we are not responsible for updating this or any blog post/article for subsequent changes in the law or its interpretation.


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